On 25 January 2006 a Beech Aircraft Corporation 200 (King Air) aircraft was north bound en route from Essendon, Vic., to Shepparton, Vic. The aircraft was operating under the instrument flight rules (IFR) and was climbing to flight level (FL) 130. At the same time, an Airbus A320-232 (A320) aircraft was south-west bound en route from Sydney, NSW, to Avalon, Vic., and was on descent to FL130. The aircraft were in airspace that was being managed by the Melbourne Departures North controller (north controller). The King Air pilots were communicating with air traffic control on the Melbourne Departures South frequency. The A320 pilots were communicating with air traffic control on the Melbourne Approach East controller's (east controller's) frequency.

When the aircraft were about 10 NM east of Melbourne at FL130, Melbourne air traffic controllers realised that a potential for an infringement of separation existed and a short term conflict alert activated on their air situation displays. The controllers issued turn instructions to the crews of each aircraft, which preserved the required 3 NM radar separation minima. The east controller also issued traffic information on the King Air to the crew of the A320. A review of the recorded radar data showed that the two aircraft came within about 4 NM of each other.

Although there was no infringement of separation standards, the controllers concerned were not aware that a potential conflict existed between the two aircraft until avoiding action, initiated by air traffic control, was required in order to preserve the 3 NM radar separation standard. There was a breakdown in coordination between the east controller, the north controller and the south controller.